Question

Why is important is considered the demographics Characteristics when starting any new business.

Answer 1

It is very essential to consider the demographic factors before starting a new venture. Demographic characteristics include occupation, age, race, income, family status and educational qualifications of individuals. An entrepreneur needs to monitor all these factors before starting a business. It helps the entrepreneur to understand the preference of customers. The interest and preference of customers depends on all these factors. The entrepreneur can easily identify whether the product will have demand on particular good by analyzing these demographic factors. The data collected will be helpful in classifying the while market into different segments. The firm can identify the particular market segment which is interested towards the product and make satiric plans accordingly.

If the entrepreneur conducts the study before starting the venture the demand for the product can be interpreted easily. So that the individual can make necessary changes in the product in order to attract the customers. Demographic characteristics can be used as a tool to make business strategies. It helps the firm to target only on prospective customers. It also helps thee firm to decide the allocation off capital to advertising and production activities. It is very relevant for a new venture to make a correct marketing plan and to refine the marketing budget. The study helps the firm to utilize the available financial resources effectively and efficiently. Thus it is helpful in understanding the nature of customers and to build an appropriate company logo, advertisement etc. It helps to change the overall perception of the customers about the product. If a firm consider the demographic characteristics while staring a business it helps the firm to develop a product which is capable of satisfying the needs and preference of the customers.

In short it is better to start business after considering the demographic factors. It helps the entrepreneur to identify whether the venture will be profitable or not. Demographic characteristics of an individual have a greater role in demanding the products. Thus it helps thee firm to understand the demand for the product in the market and to make changes to increase the demand. It also helps to get a better idea about thee targeted market.